Netherlands becomes world’s second “net neutrality” country

The net neutrality law finally passes the Dutch Senate.

A year ago, the former Dutch telecoms monopolist KPN unveiled a plan to make mobile users pay extra for data used by certain third-party apps, such as WhatsApp and Skype, that replaced KPN services like text messaging and voice calls. In response, the Dutch parliament quickly added net neutrality provisions to its telecommunications law. Tuesday, the Dutch senate at last approved the law, making the Netherlands the second country in the world (after Chile) with net neutrality written into statute.

The new law also requires websites to ask users for permission before cookies can be stored in their browsers, but these provisions won't go into effect until 2013, giving the European Union some time to address the user tracking issue.

How we got here

Let's return to 2011, when KPN issued a press release announcing its annual report. "In Q4 2011, the wireless market remained challenging, and a further decrease of voice and SMS service revenues was noticeable," it said then. "Data usage continued to rise due to the increased usage of communication apps. This changing customer behavior, which was first witnessed in Q1 2011 at the Hi brand, is now also visible at the KPN brand." (The Hi brand is targeted at a young/urban demographic.)

To keep its average revenue per user (ARPU) up, KPN planned to make users pay extra for using third-party messaging or VoIP applications over 3G. This did not go over well.

The company quickly backpedaled, but the Second Chamber of parliament asked the Minister of Economic Affairs, Maxime Verhagen, to add net neutrality provisions to the telecommunications law. The minister complied, agreeing that charging extra for using certain kinds of third-party apps "went too far." This week, Verhagen defended the law in the First Chamber (the Senate), where it was also adopted.

The new law requires companies providing access to the Internet to treat all Internet services equally. They cannot favor their own services, nor charge extra to access a competitor's service. However, it remains unclear what this means for services that aren't provided over "the Internet." For instance, cable operators and more and more ADSL operators provide video on demand to their subscribers; although these are often based on some kind of IPTV (video over Internet Protocol), such services aren't provided over the open Internet but only over the service provider's network. As such, it's possible to argue that the net neutrality provisions don't apply. (In the US, Comcast is currently making this same argument about its own IP-based video services.)

Net neutrality is broader than just prohibiting charging more money for certain kinds of data traffic. It also applies to selectively slowing down traffic belonging to certain applications or services, and the blocking of applications or services. However, the requirement that ISPs treat all Internet services the same doesn't mean users can once again enjoy visits to The Pirate Bay—an exception is made for court orders.

We'll just charge more for everything

KPN's reaction to the backlash last year was to drastically increase the price of 3G data plans. I signed a SIM-only contract with KPN two years ago to accompany my unlocked iPhone 4, and I paid €10 a month for a modest plan that included 100 minutes or text messages and "unlimited" data at 384Kbps. Today, a similar contract runs €12 a month and has a data limit of 100MB per month—but you do get to use those 100 megabytes at the much higher speed of 2Mbps. Ironically, KPN now has commercials promoting the use of the messaging apps it tried to bill for with the new tagline: "Who still makes calls?"

The other two mobile operators in the Netherlands, Vodafone and T-Mobile, quickly followed suit and raised their 3G data prices as well. However, VoIP—and especially messaging—use relatively little data, so it's now a different class of user who has to pay to keep the mobile operator's ARPU up: heavy Web users, especially those who like to stream video on the go.

23 Reader Comments

When netneutrality was proposed many of us who have a clear picture of matters said that this would lead to higher prices and probably data caps, this is exactly what has happened. I also dont have a problem with that, you simply get what you pay for.

When netneutrality was proposed many of us who have a clear picture of matters said that this would lead to higher prices and probably data caps, this is exactly what has happened. I also dont have a problem with that, you simply get what you pay for.

No, that is too simple of a perspective on this particular issue. There is a monopolistic entity that can get away with this. IF there were competition, then these companies would try to look elsewhere to supplement the heavy price cuts that get employed in a non-colluded market. Data caps would not fare well in a competitive market unless there was an informal agreement between major players which would form the basis for collusion (which may run contrary to any law that was written to prohibit such activities)

When netneutrality was proposed many of us who have a clear picture of matters said that this would lead to higher prices and probably data caps, this is exactly what has happened. I also dont have a problem with that, you simply get what you pay for.

No, that is too simple of a perspective on this particular issue. There is a monopolistic entity that can get away with this. IF there were competition, then these companies would try to look elsewhere to supplement the heavy price cuts that get employed in a non-colluded market. Data caps would not fare well in a competitive market unless there was an informal agreement between major players which would form the basis for collusion (which may run contrary to any law that was written to prohibit such activities)

KPN doesnt hold a monopoly, far from it, they are the largest mobile telco but there are other telco's as well who follow the same pattern. Also, we HAD quite a few smaller mobile telco's some years ago, they lost out because they couldnt match the economy of scale that KPN, Vodafone and T Mobile can bring to the market, not to mention the cost of investing in new technology like 3G at the time.

Competition is not a panacea and believing it is...well...lets just say its not very realistic.

When netneutrality was proposed many of us who have a clear picture of matters said that this would lead to higher prices and probably data caps, this is exactly what has happened. I also dont have a problem with that, you simply get what you pay for.

No, that is too simple of a perspective on this particular issue. There is a monopolistic entity that can get away with this. IF there were competition, then these companies would try to look elsewhere to supplement the heavy price cuts that get employed in a non-colluded market. Data caps would not fare well in a competitive market unless there was an informal agreement between major players which would form the basis for collusion (which may run contrary to any law that was written to prohibit such activities)

KPN doesnt hold a monopoly, far from it, they are the largest mobile telco but there are other telco's as well who follow the same pattern. Also, we HAD quite a few smaller mobile telco's some years ago, they lost out because they couldnt match the economy of scale that KPN, Vodafone and T Mobile can bring to the market, not to mention the cost of investing in new technology like 3G at the time.

Competition is not a panacea and believing it is...well...lets just say its not very realistic.

Real competition always brings prices down, especially when they are set artificially high to begin with. However, companies have learned to collude when the number of competitors is small. In telecom its almost universal these days.

When netneutrality was proposed many of us who have a clear picture of matters said that this would lead to higher prices and probably data caps, this is exactly what has happened. I also dont have a problem with that, you simply get what you pay for.

ISPs buy up bandwidth at $1/month/mbit for dedicated lines to the backbone, then they turn around and re-sell 15Mb/s with a 100GB cap for $70/month. Not only does 15Mb cost the ISP only $15/month, they give you a 100GB cap which is effectively only 0.31Mb/s over the month

When netneutrality was proposed many of us who have a clear picture of matters said that this would lead to higher prices and probably data caps, this is exactly what has happened. I also dont have a problem with that, you simply get what you pay for.

No, that is too simple of a perspective on this particular issue. There is a monopolistic entity that can get away with this. IF there were competition, then these companies would try to look elsewhere to supplement the heavy price cuts that get employed in a non-colluded market. Data caps would not fare well in a competitive market unless there was an informal agreement between major players which would form the basis for collusion (which may run contrary to any law that was written to prohibit such activities)

KPN doesnt hold a monopoly, far from it, they are the largest mobile telco but there are other telco's as well who follow the same pattern. Also, we HAD quite a few smaller mobile telco's some years ago, they lost out because they couldnt match the economy of scale that KPN, Vodafone and T Mobile can bring to the market, not to mention the cost of investing in new technology like 3G at the time.

Competition is not a panacea and believing it is...well...lets just say its not very realistic.

Actually, having two competitors isn't that far from a monopoly. It's easy for three players to collude, whether explicitly or implicitly, with results not much better than a monopoly.

Once again we have yet another article claiming to be about "neutrality" but isn't. It's a mis-frame, an abuse of language.

Public network neutrality does not exist unless the public owns the network. Anything else claiming to be neutral is a trick, a gimmick designed to placate, and likely a very temporary one at that since laws can be repealed or changed. The only country known to me that actually satisfies that condition (in the near future) is Australia, since part of its national broadband initiative is public buyback of the network. For once Australia is setting an outstanding example rather than behaving like a Mini-Me version of the U.S. government, and every other nation is ignoring that example.

When netneutrality was proposed many of us who have a clear picture of matters said that this would lead to higher prices and probably data caps, this is exactly what has happened. I also dont have a problem with that, you simply get what you pay for.

It does seem like a double edged sword, but I'm thinking it's the lesser of two evils. With Comcast's 250gb limit I'd find it appealing if they offered a VOD service that doesn't count against the data cap, even if Netflix still does, but then what's to stop them from then lowering their monthly cap to 50gb, essentially pushing Netflix out of the market and forcing users into their VOD service due to the artificially low bandwidth cap.

If nothing else NN does ensure a baseline service that will allow the provider's own offerings to be palatable, which in turn allows competing services to have a shot.

I'd rather see both NN and unlimited data usage with no throttling, and it could very likely be done profitably right now, but as was mentioned earlier with landline providers (at least in the US) operating in de facto monopoly and wireless carriers being able to easily collude since there are only a few, it might be a long way coming.

When netneutrality was proposed many of us who have a clear picture of matters said that this would lead to higher prices and probably data caps, this is exactly what has happened. I also dont have a problem with that, you simply get what you pay for.

On the other hand this can also stimulate competition which can provide the same service (or better) for lower prices.

Just look at what Free did in France to see how an underdog can come and shake the market and get the big operators reconsider the tariffs they're asking for.

When netneutrality was proposed many of us who have a clear picture of matters said that this would lead to higher prices and probably data caps, this is exactly what has happened. I also dont have a problem with that, you simply get what you pay for.

On the other hand this can also stimulate competition which can provide the same service (or better) for lower prices.

Just look at what Free did in France to see how an underdog can come and shake the market and get the big operators reconsider the tariffs they're asking for.

Well, the government has a plan to provide for 2 new mobile frequencies on which the existing mobile telco's cannot bid, whether that will be found legal is another matter or if its still on the table after the collapse of the government but essentially they are intending to force competitiveness into the market, we'll see if that goes any better than the first time around.

Meanwhile in the same country, not only is the The Pirate Bay blocked by the biggest ISP's, a political party has been forbidden from mentioning on its website proxy services that could circumvent that block.

The devil is in the details. What does the Dutch law say about providing different quality of service to certain classes of traffic? IPTV, VoIP, and VVoIP all use RTP over UDP instead of TCP. Without DSCP-based QoS management, congestion avoidance for RTP is pretty much non-existent. This usually doesn't matter too much for VoIP, because it's very low bandwidth, but video apps are another story.

As several people have noted above, you can solve this by over-building your edge networks and charging everybody more, but it's a vastly more effective solution to have two tiers of service, one that treats all traffic uniformly, and one that honors certain DSCP markings with realtime-appropriate QoS.

So many countries in the West boast about freedom. The Dutch are the ones who actually do something about it.

This doesn't sound like freedom to me:

Quote:

I signed a SIM-only contract with KPN two years ago to accompany my unlocked iPhone 4, and I paid €10 a month for a modest plan that included 100 minutes or text messages and "unlimited" data at 384Kbps. Today, a similar contract runs €12 a month and has a data limit of 100MB per month—but you do get to use those 100 megabytes at the much higher speed of 2Mbps.

I'm assuming the 100 megabyte cap was no typo as it was written twice in the same sentence, abbreviated and then spelled out. And the "much higher speed" of 2mbps is very slow--but I'll agree it's an improvement over 384kps--although the way the article is written is somewhat confusing as in the US 384kBps ~= 3mbps down (which would mean that 2mbps down is a degradation in speed from 384kbps down. 2,000,000 / 8 = 250kbps down.) I suppose it is possible that you meant 384k bits p/s down, but that would mean 48 K bytes ps down--which is dial-up territory, and yea, 2mbps down would in that case be a lot faster, as in 250KBytes ps down vs. 48KBps down.

Internet freedom to me is that you not only get rid of 3rd-party software discrimination, but that you also get rid of caps and get rid of artificial speed categories. I mean, some people will opt for the slower speeds just to pay less, and others opt for the higher speeds and pay more, so why not just put everyone on the highest speed possible and have everyone pay the average between the two pricing tiers--low speed customers would have to pay more (but still less than the former high-speed tier) while high speed customers would have to pay less (while still getting the speed they wanted), but everyone is paying the same thing and enjoying the same unlimited access sans data caps.

IMO, the concept of "paying for the quantity of data you download (in bits or bytes)" is a real rip off and is certainly *not* a "neutral" treatment of customers. Removing the caps, removing the speed categories, and charging everyone the same prices--that's what I call "neutral." Everybody seems to look for "net neutrality" in all the wrong places--where it needs to be addressed is in the relationship between the ISP and his individual customers.

I'm assuming the 100 megabyte cap was no typo as it was written twice in the same sentence, abbreviated and then spelled out. And the "much higher speed" of 2mbps is very slow--but I'll agree it's an improvement over 384kps--although the way the article is written is somewhat confusing as in the US 384kBps ~= 3mbps down (which would mean that 2mbps down is a degradation in speed from 384kbps down. 2,000,000 / 8 = 250kbps down.) I suppose it is possible that you meant 384k bits p/s down, but that would mean 48 K bytes ps down--which is dial-up territory, and yea, 2mbps down would in that case be a lot faster, as in 250KBytes ps down vs. 48KBps down.

Once again we have yet another article claiming to be about "neutrality" but isn't. It's a mis-frame, an abuse of language.

Public network neutrality does not exist unless the public owns the network. Anything else claiming to be neutral is a trick, a gimmick designed to placate, and likely a very temporary one at that since laws can be repealed or changed. The only country known to me that actually satisfies that condition (in the near future) is Australia, since part of its national broadband initiative is public buyback of the network. For once Australia is setting an outstanding example rather than behaving like a Mini-Me version of the U.S. government, and every other nation is ignoring that example.

Yeah, because the government is completely neutral. No lobbies going on there. No party politics either, only neutral politics. /s

What does "the public owns the network" even entail? Does every single person have say on everything? Will that lead to any kind of neutrality you think? A public owned network can be just as non-neutral as a privately owned one. In the end neutrality is just a rule that the network has to follow, private or public. The rule has up- and downsides, not matter who owns the network.

Concerning the Pirate Bay, it is worth mentioning it is still legal to download anything in The Netherlands. Uploading or distributing is illegal. That's why the Pirate Bay is blocked.

That is still censorship of the Internet. And TPB does not upload material itself, it merely points to the uploaded files. That is also an important distinction.

But the real problem is that a political party has been told by a court it cannot publish on its own website technical information that is core to its agenda. This is not stepping on a slippery slope, this is already halfway down!

Concerning the Pirate Bay, it is worth mentioning it is still legal to download anything in The Netherlands. Uploading or distributing is illegal. That's why the Pirate Bay is blocked.

That is still censorship of the Internet. And TPB does not upload material itself, it merely points to the uploaded files. That is also an important distinction.

But the real problem is that a political party has been told by a court it cannot publish on its own website technical information that is core to its agenda. This is not stepping on a slippery slope, this is already halfway down!

IMO complete freedom isn't a good thing. Complete freedom would mean a country should have no laws at all; everything should be allowed then. Fortunately, that is not the case. Racism for example isn't allowed, the internet is not an exception. Free distribution of things that aren't free is considered illegal and apparently aiding to the distribution (Pirate Bay or publishing how to circument blocks), is considered illegal by law as well. Aiding to crime is illegal. Transporting hard drugs is illegal, even if you didn't grow the drug yourself.

Iljitsch van Beijnum / Iljitsch is a contributing writer at Ars Technica, where he contributes articles about network protocols as well as Apple topics. He is currently finishing his Ph.D work at the telematics department at Universidad Carlos III de Madrid (UC3M) in Spain.